- Sterling falls on lower consumer and producer price expectations
- UK unemployment data tomorrow and the impact of Brexit
- GBPAUD exchange rates fall back to 1.75 ranges, further losses ahead?
Is now a good time to buy the Australian Dollar
The prospect for further GBPAUD growth is diminishing, the latest economic releases for the UK whilst still positive, have fallen short of expectations and as a result, Sterling has slid against a basket of currencies.
This seems to be growing trend since the EU referendum, as investors look to understand the economic sentiment during a period of huge uncertainty, any signs of weakness intensify Sterling’s losses. And with this comes tomorrow’s unemployment data and wage growth percentages, which are unlikely to surprise given the business sentiment since the historic vote.
Unemployment could rise following Brexit
It remains a continuing concern for the financial sector following Brexit, with corporate entities looking to move their Headquarters into Europe to maintain current business conditions. Whilst many hold the view that the UK will maintain its name as the financial hub of the world, unless post-Brexit negotiations can cater for its most important sector, the UK could lose a large amount of its economic power.
It’s difficult to argue that employment rates will improve during this time of uncertainty, with businesses less likely to make huge decisions. I am expecting unemployment rates to worsen in these conditions, which could equate to Sterling weakness tomorrow. Tomorrow’s GBPAUD exchange rates could be flirting with the lower end of 1.75, possibly lower.
Will GBPAUD exchange rates improve?
It’s looking more likely that the peaks of the Brexit limbo have been reached, and further losses are likely as the impact of the vote spills into the economy. If you need to buy Australian Dollars in the weeks ahead, I would consider doing so sooner rather than later as rates could take a turn for the worse in the foreseeable future.